PIP #1 - Launch the mPENDLE Stability Vault and Allocate 20% of mPENDLE Staking Pool Revenue Share to It

Launch the mPENDLE Stability Vault and Allocate 20% of mPENDLE Staking Pool Revenue Share to It.

Abstract

Penpie has introduced mPENDLE, a variant of Pendle Finance’s governance token PENDLE that allows users to earn PENDLE rewards on Penpie, while offering the flexibility to trade mPENDLE for PENDLE anytime they want. However, the mPENDLE peg does not accurately reflect PENDLE’s price, posing challenges for users converting between the tokens seamlessly. This proposal recommends launching the mPENDLE Stability Vault on Arbitrum while allocating 20% of mPENDLE Staking Pool’s revenue share to support it.

Motivation

This proposal aims to address a critical issue currently impacting the value and user experience of mPENDLE tokens. The suboptimal conversion rates when swapping mPENDLE to PENDLE can negatively impact users. Launching the mPENDLE Stability Vault on Arbitrum can bolster mPENDLE’s long-term value appreciation by maintaining a stable price ratio with PENDLE.

The mPENDLE Stability Vault will allow users to lock their mPENDLE tokens and earn 20% of PENDLE rewards. This can potentially increase long-term holders supporting mPENDLE’s price. Additionally, new users acquiring mPENDLE on Wombat Exchange can benefit from the Stability Vault.

Furthermore, the Vault prevents existing mPENDLE owners from destabilizing the system and dropping the conversion ratio during new PENDLE RUSH events. This ensures a healthier, more stable peg ratio for mPENDLE over time. Stability Vault holders may gain additional advantages in the future.

The Stability Vault strategy has proven successful in increasing the value of Magpie’s variant of the WOM token, mWOM, on Arbitrum and BNB Chain. The mWOM Stability Vault has ensured high conversion ratios for Magpie users, with respective pegs of 97% and 84%, thereby helping to outperform its competitors.

Specification

• Deploy the mPENDLE Stability Vault on Arbitrum
• Allocate 20% of the mPENDLE Staking Pool revenue share into the mPENDLE Stability Vault